Is Boris sh*tting himself?

[grumbledoak]

Tuna said:

Someone took a look at that. Roughly speaking, membership of the EU free trade area is estimated to cost us about 8 billion a year. The average WTO tariff of 3% on our exports would 'cost' us 4 billion.

As the man himself put it: "Even no deal is better for the United Kingdom than the current rotten deal that we've got."

Yet Project Fear continues.

[Robbo66]

whoami said:

vonuber said:

Elysium said:

It rather depends on which shares you bought. RBS was 180p when the markets opened on Friday, compared to 250p the evening before. The 'dead cat bounce' took it back to 210 during the course of the day. It fell as low as 153p yesterday and closed at 173p today.

If your timing was perfect you could have made money on Friday. Doubtless some people did. I expect a lot more money has been made by shorting shares in the last few days.

Businesses exposed to Brexit (banks and housebuilders so far) have been hit hard. Commercial property values are already down and availability of corporate finance is uncertain.

I think it would have been far worse if it were not for the following:

1. Cameron's resignation and the creation of 3 months grace before anyone pushes the exit button.
2. Carneys announcement that the BOE has a £250bn war chest (although if we need to use this we will have thrown away 50 years worth of EU payments)
3. The realisation that the leave campaign has no plan and is backtracking from any situation that would see us exit the common market
4. Confirmation that an act of parliament will be required before any PM can give notice under Article 50.

We are in a holding pattern now and the next big event will be the selection of the next PM.

So in summary, our economy is already hemorrhaging money and we will almost certainly waste many years worth of 'theoretical' EU savings. There will be no new hospitals and no additional cancer drugs. Best case, we will drop this nonsense and go on as we were, a member of the EU, with voting rights and a greater level of control of our destiny than the rest of the group (i.e. outside schengen).

Worst case, we will end up like Norway, paying the same as before (or more) for access to the common market, bound largely by the same rules for free movement and legislation of trade, but with no voting rights.

In time, this entire debacle will give us a new definition for a pyrrhic victory

Probably the best summation of the situation at present I have read.

Nice and negative.

Just the way you like it.

Not negative, entirely realistic. Article 50 is critical, no one wants to press it, and Parliament will probably veto it or find some way of blocking hopefully. Utter madness.

[Elysium]

Tuna said:

I'm still trying to figure out the plunge of building companies. Rumours of the London market having ground to a halt have been going round for a few months and this may be the correction that was overdue. At the same time, is it purely sentiment that's damaging their value? All the building sites I pass on the way to work are still in full flow and people keep saying how much they need their project to complete so they can move in or get on with their business.

The housebuilders are bearing the brunt so far. Taylor wimpey went from 190 to 111 and has settled for now at 120 - so 37% down.

I think this is reflecting house builders particular exposure to brexit due to a combination of potential rises in interest rates, new restrictions on lending and reduced overseas purchasers. Plus a big lump of 'wait and see' which is likely to stagnate the housing market.

Property values were pretty much at peak so a downturn was on the cards anyway, but not at this level or speed. There is no doubt in my mind that this is Brexit led and the striking thing is that it could have been a lot worse if events had not reassured investors that there was no chance of anyone pulling the article 50 lever in the near future.

You won't see any impact on operational building sites. Companies have contractual commitments that would be expensive to exit. New construction starts were already slowing in preparation for brexit. Commercial property transactions have also stalled whilst investors wait for events to unfold. We also have a situation already where it is impossible to value commercial property as transactional evidence can't be gathered quickly enough and no-one can work out quite how bad it will be.

[///ajd]

Tuna said:

Someone took a look at that. Roughly speaking, membership of the EU free trade area is estimated to cost us about 8 billion a year. The average WTO tariff of 3% on our exports would 'cost' us 4 billion.

The fact is that the 'free trade' area is not free. It costs us money to be part of (Boris' famous £350 million a week). Though that's not written up as a tax on our exports, that's what it effectively is. In addition, it further restricts our ability to export to places like China ($26 billion a year of our exports currently).

So, for sure the EU could try to screw us over, and it would mean that the promise of better funding to the NHS would probably suffer, but on the whole they're not in some unique bargaining position to force us into submission.

I'm still trying to figure out the plunge of building companies. Rumours of the London market having ground to a halt have been going round for a few months and this may be the correction that was overdue. At the same time, is it purely sentiment that's damaging their value? All the building sites I pass on the way to work are still in full flow and people keep saying how much they need their project to complete so they can move in or get on with their business.

I'm trying to make sense of it all. This is a handy page if you wonder where our exports go: http://atlas.media.mit.edu/en/profile/country/gbr/

You're still trying to figure it out?

Your analysis of the £8bn vs £4bn is not only false, but what is happening shows that investment decisions are stopping as businesses head for certainty and the need to avoid any tariffs.

[RYH64E]

grumbledoak said:

Tuna said:

Someone took a look at that. Roughly speaking, membership of the EU free trade area is estimated to cost us about 8 billion a year. The average WTO tariff of 3% on our exports would 'cost' us 4 billion.

As the man himself put it: "Even no deal is better for the United Kingdom than the current rotten deal that we've got."

Yet Project Fear continues.

You don't pay duty on exports you pay it on imports. The cost of duty is largely irrelevant, by far the biggest cost will result from companies relocating back into the EU, or prioritising investment at their EU plants. If financial service lose passporting (and with no deal they will) they will have no choice but to relocate, duty on cars isn't 3% it's 10%, in an industry that counts the cost of every nut and bolt 10% is huge and will make exports totally uncompetitive against EU manufacturer cars. Other sectors will be similarly affected.

[tenfour]

Jader1973 said:

I think they are all stting themselves.

They have no way to implement a Brexit and deliver what they claimed it would deliver. Backtracks I've heard so far include:
1) can't have FTA and not free movement
2) 350 million a day for the NHS was misleading
3) no drop in immigration
4) taxes up, spending down

Imagine PM BJ's phone call to the EU:

EU: Allo, Allo. Zis ees the EU. Who ees thees?

BJ: Hello old chap. My name is Boris. I'm thinking about invoking Article 50 but I'd like to know the implications of doing so before I do it. I was wondering if you'd be a jolly good fellow and explain it to me.

EU: You leave ze EU

BJ: Yes, yes I know that my old chum. What I mean is what does that actually mean? You know, in terms of free trade and freedom of movement and stuff.

EU: well....it means you leave ze EU.

BJ: I understand that bit. Come on, how about a hint? Just a tiny clue? How about I pop over with some scones and jam and we have a chat about it?

EU: I 'ave already told you. It means you leave ze EU. If you want to find out what zat means zen invoke Article 50. Or are you, as zey say, chicken?

BJ: I say. Steady on old chap. No need to get personal. Bloody foreigner, not telling me how to run my country. <click>

EU person 2 to EU person: Oo vas zat?

EU person: Boris.

EU person 2: Again!! Next time Ah am going to tell eem Ah will invoke Article fking 50 for eem. fking 'ell. Ah am fed up with thees sheet.

Well, I laughed

[Derek Smith]

eharding said:

I think you'll find whilst Don was born Irish, he was raised as a Cockney. I think we'll have to blame to sound of Bow Bells for him being such a Cockney Winker.

I don't think you can be raised a cockney. If you were born within the sound of Bow Bells then you are a cockney. If you were born elsewhere and raised within the sound of Bow Bells you are an East Ender. If you are an East Ender and say you are a cockney, you are pretentious.

I have no idea what he calls himself. I an talking generically.

Edited by Derek Smith on Wednesday 29th June 07:46

[4x4Tyke]

grumbledoak said:

Tuna said:

Someone took a look at that. Roughly speaking, membership of the EU free trade area is estimated to cost us about 8 billion a year. The average WTO tariff of 3% on our exports would 'cost' us 4 billion.

As the man himself put it: "Even no deal is better for the United Kingdom than the current rotten deal that we've got."

Yet Project Fear continues.

So Project Stark Reality.

The great mans EU voting record - http://www.votewatch.eu//en/term8-european-parliam...

[don4l]

vonuber said:

don4l said:

Tell us why you are depressed.

Give us your analysis of the current stock market situation.

Last Friday at about 7:45, I advised people to buy shares. Anyone who took my advice could have made(an average) 6% in 8.5 hours.

Today's recovery was nothing compared to Friday's.

If you want to take your advice from the propoganda driven BBC, then go ahead.

Anyway, give us your expert analysis.

Don't you have an Irish passport and therefore this doesn't actually affect you as you can always bugger off back there or to any other european country of your choice (if they'll have you - oh wait, they will)?

You'd like me to bugger off back to Ireland?

Are there any other foreigners that you would like to send home?

I must say that I enjoyed your post. I don't have an Irish passport. Like you, I have a European Union passport (for the moment).

[pim]

tenfour said:

Jader1973 said:

I think they are all stting themselves.

They have no way to implement a Brexit and deliver what they claimed it would deliver. Backtracks I've heard so far include:
1) can't have FTA and not free movement
2) 350 million a day for the NHS was misleading
3) no drop in immigration
4) taxes up, spending down

Imagine PM BJ's phone call to the EU:

EU: Allo, Allo. Zis ees the EU. Who ees thees?

BJ: Hello old chap. My name is Boris. I'm thinking about invoking Article 50 but I'd like to know the implications of doing so before I do it. I was wondering if you'd be a jolly good fellow and explain it to me.

EU: You leave ze EU

BJ: Yes, yes I know that my old chum. What I mean is what does that actually mean? You know, in terms of free trade and freedom of movement and stuff.

EU: well....it means you leave ze EU.

BJ: I understand that bit. Come on, how about a hint? Just a tiny clue? How about I pop over with some scones and jam and we have a chat about it?

EU: I 'ave already told you. It means you leave ze EU. If you want to find out what zat means zen invoke Article 50. Or are you, as zey say, chicken?

BJ: I say. Steady on old chap. No need to get personal. Bloody foreigner, not telling me how to run my country. <click>

EU person 2 to EU person: Oo vas zat?

EU person: Boris.

EU person 2: Again!! Next time Ah am going to tell eem Ah will invoke Article fking 50 for eem. fking 'ell. Ah am fed up with thees sheet.

Well, I laughed

This is good.Boris we trust.>

[turbobloke]

Robbo66 said:

Not negative, entirely realistic. Article 50 is critical, no one wants to press it, and Parliament will probably veto it or find some way of blocking hopefully. Utter madness.

As you were typing that, the more likely scenario involves a situation akin to that kick-started by the PM and announced in the Commons, even before his replacement is in harness. In rooms not far from EU HQ there is a small army of technical grunts and policy wonks emerging from sleep and recalling sweet dreams of generating pages of turgid but precise prose in an iterative process which will eventually allow EU politicians to think they did it themsevles when a new agreement with the UK is reached a couple of years down the line.

[vonuber]

don4l said:

You'd like me to bugger off back to Ireland?

Are there any other foreigners that you would like to send home?

I must say that I enjoyed your post. I don't have an Irish passport. Like you, I have a European Union passport (for the moment).

No i said you could if you wanted to - for some reason I thought you were an Irish citizen. Clearly I was mistaken.

[Derek Smith]

It seems senior tories want Johnson as PM.

And PH reckoned labour had pressed the self destruct button!

[V8RX7]

Derek Smith said:

It seems senior tories want Johnson as PM.

And PH reckoned labour had pressed the self destruct button!

Because the next PM will get all the blame and Boris started it !

[Derek Smith]

lostkiwi said:

Article 50 is a trapdoor. Once invoked there is no mechanism to backtrack.

I'm not so sure. It has not been activated before so the rules are more or less guidelines.

Practically though if it is activated it might have to go for a vote for all members and if so then that's the big plummet.

[sanf]

RYH64E said:

grumbledoak said:

Tuna said:

Someone took a look at that. Roughly speaking, membership of the EU free trade area is estimated to cost us about 8 billion a year. The average WTO tariff of 3% on our exports would 'cost' us 4 billion.

As the man himself put it: "Even no deal is better for the United Kingdom than the current rotten deal that we've got."

Yet Project Fear continues.

You don't pay duty on exports you pay it on imports. The cost of duty is largely irrelevant, by far the biggest cost will result from companies relocating back into the EU, or prioritising investment at their EU plants. If financial service lose passporting (and with no deal they will) they will have no choice but to relocate, duty on cars isn't 3% it's 10%, in an industry that counts the cost of every nut and bolt 10% is huge and will make exports totally uncompetitive against EU manufacturer cars. Other sectors will be similarly affected.

I've posted the same questions on another EU thread - as this is the subject that it's hard to understand the full implications of.

The deficit is the bit I find interesting - at the moment our trade deficit with the EU was £23.9 billion in 1st 3 months of 2016 (so heading to £96 billion for the year), and £10.8 billion (£43.2 billion) with the ROW. SO if we do progress and leave the EU, aren't we then inviting the ROW to come and grab their share of the £23.9 billion (per 3 months-£96 billion per year) that the EU don't want??

Does that mean if 10% tariffs were introduced and the UK gvt did the same their income would be 10% of £96 billion per year?
Is being a net importer with a huge deficit a benefit? Or can this cause other issue?
At the moment, the potential negotiations seem to be based on an almost ideal situation - the UK exports services and wants passporting rights, the EU makes loads of stuff and to sell it to UK. Different needs on each side.

Could we actually fulfill a lot of the production ourselves - more home grown food/fishing, manufacturing. I understand it costs more to produce in the UK, so the end result costs more - but isn't one of the arguments we're aiming for a higher wage economy. Is the above just too simplistic?

One car front, as it keeps cropping up - looking at stats;

The EU sold 13.713 million cars in FY 2015. 5 countries bought more than 1 million;
Germany 3.206 million
UK 2.633 million
France 1.917 million
Italy 1.574 million
Spain 1.034 million

These 5 countries buy 10.365 million of the 13.713 million cars. Which you would think makes them the core markets.
If Tariffs were imposed on the EU cars coming to the UK - could UK built ones fill the gap in the UK market and keep the businesses making money?

The Fiesta, Corsa, Focus & Golf are the top 4 selling cars - would they all potentially have tariffs?
If so the Qashqai (which is UK produced) would be sitting pretty to grab more market share
Mini is at Number 9 so could get more.

In Germany Nissan sold 69,000 units, In France 74,000 - In the UK 153,500.
In Germany Honda sold 21,000 units, in France they are not in the top 20 so <20,000. In the UK 53,000 units.
In Germany Jaguar sold 4,900 Units, 24,000 in the UK -

In the UK BMW sold 167,000 units - so would Jaguar see this as a massive opportunity?
Depending on other incentives offered in the UK there could be a 10-15% price swing in favour of UK built cars. Would the likes of JL owned by Tata be keen to look at UK specific trade deals to try and grab big market share?

I appreciate this is all very simplistic looking at numbers. Maybe the long term (10-20 years) future for the businesses is regarded as more critical from a strategic perspective for Nissan, how many cars are Poland likely to be buying in 2025?? But if not, could the UK market sustain the likes of Honda/Nissan on internal sales, while trying to do deals with other countries outside the EU?

The above isn't statements, more questions, I'm a remain voter, feeling a wee bit anxious, but also recognise if we are going it alone then we need to dive in head first, be smarter, better and more competitive in the world. Trading on our democratic values and the UK brand.

[Dr Jekyll]

sanf said:

If Tariffs were imposed on the EU cars coming to the UK - could UK built ones fill the gap in the UK market and keep the businesses making money?

We wouldn't impose such tariffs unless the govt went mad (which I agree can't be ruled out).

[Robbo66]

Derek Smith said:

It seems senior tories want Johnson as PM.

And PH reckoned labour had pressed the self destruct button!

That's exactly what they want, for reasons stated previously. Clever move by senior Tory MP's. Check Mate Boris.

[turbobloke]

Derek Smith said:

It seems senior tories want Johnson as PM.

And PH reckoned labour had pressed the self destruct button!

Labour? They had already done so with Corbyn and it got worse from that point forward.

Boris will be more than OK if elected as Party leader and PM.

[Tuna]

One position to take would be:

We choose to impose no tariffs on goods imported to the UK. That benefits us - stuff is cheaper. The reason we import is because someone somewhere else in the world can make something cheaper than we can make it ourselves.

On stuff we export, we show the tariffs that the EU chooses to impose as an 'effective tax rate'. Anyone exporting to the EU from the UK must show that as a line item on the bill. So anyone buying UK goods in the EU can see that the higher price they pay is due to their own government's tariffs.

Now, companies can move abroad if they choose, but it doesn't make goods more expensive for us (we impose no tariffs) and if they can manufacture cheaper elsewhere it benefits us further (cheaper stuff). Yes, I know they could just all move abroad, but it turns out that they don't - for lots of reasons - and an economically active country is an attractive place to run a business.

The end result is we look like global businessmen and the EU looks like idiots for imposing tariffs. How well will it go down in Europe if it's clear that the EU is making it more expensive to buy things? "Ah yes, but we are punishing the UK, by making it cost more to buy their Whiskey!"

It doesn't benefit us at all to engage in a tariff war. We want to make stuff cheaper, and we want to make doing business within the UK attractive. The EU can punish us, but it has no control over how we trade with the rest of the world, so it's actually a minority player in our overall economy. As a net importer, the tariffs we impose are the larger component of the 'cost', and we control those (and can choose to eliminate them).